Draw a path using the pen tool. Make sure the Path palette is open (Window > Show Paths), and you'll see your path appear as 'Work Path'. You must save this path before you use it as a clipping path (the little arrow in the top-right corner of the Paths palette gives you the option to do just that, and name it too).
Although some programs can use this saved path as a clipping path, it is better to specify that it is indeed a clipping path. Go back to the fly-out menu as before, choose 'Clipping Path', then choose the path you want to use. If you are importing it into another program, it is best to save it as an EPS. TIFFs work too, but when it comes to clipping paths, EPS files seem to be a bit more reliable.
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